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Scott Stevens: Prepare for the unforeseen

22 January 2020

The current pandemic and resulting financial crises mean it's now more important than ever that you prepare your business for the unforseen.

If you have your own business it's vital that you make putting a locum agreement in place (or having someone who can stand in for you, should you not be able to work) your number-one priority.

As we've seen, life is unpredictable, and in the blink of an eye your ability to meet the servicing requirements of your clients could change, whether due to self-isolation, illness, undergoing treatment or worse. Failing to have someone in place that can pick up the slack could result in catastrophe for a sole trader.

In most scenarios there will be a reduction in income, as ongoing service fees cannot be charged if services are not actually taking place. This will have a significant impact on your business’s value.

If left unchecked, it could leave no legacy for your family, or no means to support you.

But it is about more than just self-interest. Most financial planners have consistently put their clients first, and a locum agreement is an extension of this commitment that ensures a continuation of service.

It can also be of regulatory concern if there is no locum, because in the current regulatory environment financial advisers must deliver against client agreements and have appropriate oversight and control.

Choosing the right locum partner is extremely important. Many advisers select people like themselves, often friends with similar views, client philosophies and experience. This makes sense at one level, as experience ensures clients receive a consistent level of service if something were to happen.

However, people who are already running a business may not have bandwidth. Likewise, if they are of a similar age they might experience similar issues.

If you are part of a network, it will often be able to give guidance on good locum partners, offer templated agreements and provide access to third-party law firms.

While we face uncertain times, ensuring that a credible locum agreement is in place is one way you can add some certainty.

Scott Stevens, head of adviser recruitment and development at Quilter Financial Advisers

This column first appeared on FT Adviser 22nd January 2020. 

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £95.3 billion in customer investments (as at 31 March 2020).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform and Quilter International, including AAM Advisory in Singapore.

The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.

Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Quilter Financial Advisers (previously Charles Derby Group)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Investment Platform in 2020)
  • Quilter International (previously Old Mutual International)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.